2006-12-01 03:54:28 · 6 answers · asked by Sean B 1 in Business & Finance ➔ Investing
No one even considered diversification until Harry Markowitz wrote is now famous paper "Portfolio Selection" in 1952. Since then there has been a very large volume of works done on the subject.
The bottom line is that a person can reduce risk and increase return by having a diversified portfolio of investments. And as of much interest is the results of studies that indicate that periodic rebalancing ones portfolio will increase returns even more.
What does diversification mean? It means investing in areas of investment that are not closely corrolated with one another. For example owning 10 different high tech stocks is not having a diversified portfolio. But owning a couple of Chinese stocks and a couple of European stocks and a couple of large cap stocks and a couple of small cap stocks and a few bonds and t-bills and a few REITs is relatively well diversified.
2006-12-01 04:56:22 · answer #1 · answered by Anonymous · 0⤊ 0⤋
true diversification ofthen means lots of stocks or mutual funds but this is hogwash because when the market crashes 3 of 4 stocks tumble with the market based on liquidity. See my blog for how this works:
http://gmoolah.blogspot.com/2006/11/market-supply-and-demand-with-little.html
True diversification includes gold/silver and even bonds or currency of another country. Like another poster said...the dollar is in trouble. This will change the market.
2006-12-01 14:18:19 · answer #2 · answered by Ryan W 2 · 0⤊ 0⤋
The mutual fund managers recommend this course of action ,but I dont believe in it.True diversification means becoming expert in one field and diversifying within that field.
The USDX cuurrrently is below 83(kitco.com) when it goes below 80 all hell will break loose.So be very careful my friend.A crash is forthcoming
2006-12-01 04:04:04 · answer #3 · answered by Paul I 4 · 0⤊ 0⤋
no count if that's a uncomplicated have faith then each and all the earnings pass to the beneficiaries--it is you and is taxable to you an comparable as even nonetheless you owned the shares. no count if that's a complicated have faith then it fairly is going to pay fiduciary earnings tax and the taxed dividends are literally no longer taxable to you. Over the long haul you paying the tax is a extra effectual ideal deal.
2016-12-29 18:30:21 · answer #4 · answered by ? 4 · 0⤊ 0⤋
YOU HAVEN'T DIVERSIFIED YOUR INVESTMENTS YET, HAVE YOU..
2006-12-01 03:57:14 · answer #5 · answered by jay j 4 · 0⤊ 0⤋
Please click on http://www.4xmoneytrain.com
You will be glad you did!!
2006-12-01 05:58:37 · answer #6 · answered by Anonymous · 0⤊ 0⤋